10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 10-Q
_______________
 
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 2015
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                        to
Commission File Number 001-04471
  
XEROX CORPORATION
(Exact Name of Registrant as specified in its charter)
New York
 
16-0468020
(State or other jurisdiction of
incorporation or organization)
 
(IRS Employer
Identification No.)
P.O. Box 4505, 45 Glover Avenue
Norwalk, Connecticut
 
06856-4505
(Address of principal executive offices)
 
(Zip Code)
(203) 968-3000
(Registrant’s telephone number, including area code)
_________________________________________________  
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
Indicate by a check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer x Accelerated filer o Non-accelerated filer o Smaller reporting company o
Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No ý
Class
 
Outstanding at September 30, 2015
Common Stock, $1 par value
 
1,012,402,754 shares

Xerox 2015 Form 10-Q
1

FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q and any exhibits to this Report may contain "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “should” and similar expressions, as they relate to us, are intended to identify forward-looking statements. These statements reflect Management's current beliefs, assumptions and expectations and are subject to a number of factors that may cause actual results to differ materially. Such factors include, but are not limited to: changes in economic conditions, political conditions, trade protection measures, licensing requirements and tax matters in the United States and in the foreign countries in which we do business; changes in foreign currency exchange rates; our ability to successfully develop new products, technologies and service offerings and to protect our intellectual property rights; the risk that multi-year contracts with governmental entities could be terminated prior to the end of the contract term and that civil or criminal penalties and administrative sanctions could be imposed on us if we fail to comply with the terms of such contracts and applicable law; the risk that our bids do not accurately estimate the resources and costs required to implement and service very complex, multi-year governmental and commercial contracts, often in advance of the final determination of the full scope and design of such contracts or as a result of the scope of such contracts being changed during the life of such contracts; the risk that subcontractors, software vendors and utility and network providers will not perform in a timely, quality manner; service interruptions; actions of competitors and our ability to promptly and effectively react to changing technologies and customer expectations; our ability to obtain adequate pricing for our products and services and to maintain and improve cost efficiency of operations, including savings from restructuring actions and the relocation of our service delivery centers; the risk that individually identifiable information of customers, clients and employees could be inadvertently disclosed or disclosed as a result of a breach of our security systems; the risk in the hiring and retention of qualified personnel; the risk that unexpected costs will be incurred; our ability to recover capital investments; the risk that our Services business could be adversely affected if we are unsuccessful in managing the start-up of new contracts; the collectibility of our receivables for unbilled services associated with very large, multi-year contracts; reliance on third parties, including subcontractors, for manufacturing of products and provision of services; our ability to expand equipment placements; interest rates, cost of borrowing and access to credit markets; the risk that our products may not comply with applicable worldwide regulatory requirements, particularly environmental regulations and directives; the outcome of litigation and regulatory proceedings to which we may be a party; and other factors that are set forth in the “Risk Factors” section, the “Legal Proceedings” section, the “Management's Discussion and Analysis of Financial Condition and Results of Operations” section and other sections of this Quarterly Report on Form 10-Q, our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2015 and June 30, 2015 and our 2014 Annual Report on Form 10-K filed with the Securities and Exchange Commission. Xerox assumes no obligation to update any forward-looking statements as a result of new information or future events or developments, except as required by law.
On October 26, 2015, Xerox announced that its Board of Directors had authorized a review of the Company’s business portfolio and capital allocation options, with the goal of enhancing shareholder value. No assurance can be given as to the outcome or timing of completion of the review. Xerox does not intend to make any further public comment regarding the review prior to its completion. The forward looking statements in this Report are subject to the risk that the Company’s business portfolio and/or capital allocation could change as a result of the review.






 

Xerox 2015 Form 10-Q
1


XEROX CORPORATION
FORM 10-Q
September 30, 2015
TABLE OF CONTENTS
 
 
Page
 
Item 1.
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
Item 4.
 
 
 
 
 
 
Item 1.
Item 1A.
Item 2.
Item 6.
For additional information about Xerox Corporation and access to our Annual Reports to Shareholders and SEC filings, free of charge, please visit our website at www.xerox.com/investor. Any information on or linked from the website is not incorporated by reference into this Form 10-Q.
 

Xerox 2015 Form 10-Q
2

PART I — FINANCIAL INFORMATION
ITEM 1 — FINANCIAL STATEMENTS

XEROX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME (UNAUDITED)
 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(in millions, except per-share data)
 
2015
 
2014
 
2015
 
2014
Revenues
 
 
 
 
 
 
 
 
Sales
 
$
1,150

 
$
1,275

 
$
3,500

 
$
3,874

Outsourcing, maintenance and rentals
 
3,098

 
3,424

 
9,630

 
10,339

Financing
 
85

 
96

 
262

 
294

Total Revenues
 
4,333

 
4,795

 
13,392

 
14,507

Costs and Expenses
 
 
 
 
 
 
 
 
Cost of sales
 
721

 
774

 
2,171

 
2,384

Cost of outsourcing, maintenance and rentals
 
2,592

 
2,444

 
7,316

 
7,386

Cost of financing
 
33

 
35

 
98

 
107

Research, development and engineering expenses
 
135

 
139

 
418

 
427

Selling, administrative and general expenses
 
855

 
942

 
2,676

 
2,846

Restructuring and asset impairment charges
 
20

 
27

 
191

 
92

Amortization of intangible assets
 
77

 
77

 
233

 
232

Other expenses, net
 
73

 
71

 
187

 
175

Total Costs and Expenses
 
4,506

 
4,509

 
13,290

 
13,649

(Loss) Income before Income Taxes and Equity Income
 
(173
)
 
286

 
102

 
858

Income tax (benefit) expense
 
(105
)
 
66

 
(75
)
 
181

Equity in net income of unconsolidated affiliates
 
40

 
44

 
103

 
119

(Loss) Income from Continuing Operations
 
(28
)
 
264

 
280

 
796

(Loss) income from discontinued operations, net of tax
 
(3
)
 
8

 
(64
)
 
34

Net (Loss) Income
 
(31
)
 
272

 
216

 
830

Less: Net income attributable to noncontrolling interests
 
3

 
6

 
13

 
17

Net (Loss) Income Attributable to Xerox
 
$
(34
)
 
$
266

 
$
203

 
$
813

 
 
 
 
 
 
 
 
 
Amounts Attributable to Xerox:
 
 
 
 
 
 
 
 
Net (loss) income from continuing operations
 
$
(31
)
 
$
258

 
$
267

 
$
779

Net (loss) income from discontinued operations
 
(3
)
 
8

 
(64
)
 
34

Net (Loss) Income Attributable to Xerox
 
$
(34
)
 
$
266

 
$
203

 
$
813

 
 
 
 
 
 
 
 
 
Basic (Loss) Earnings per Share:
 
 
 
 
 
 
 
 
Continuing operations
 
$
(0.04
)
 
$
0.22

 
$
0.23

 
$
0.65

Discontinued operations
 
—

 
0.01

 
(0.06
)
 
0.03

Total Basic (Loss) Earnings per Share
 
$
(0.04
)
 
$
0.23

 
$
0.17

 
$
0.68

Diluted (Loss) Earnings per Share:
 
 
 
 
 
 
 
 
Continuing operations
 
$
(0.04
)
 
$
0.21

 
$
0.23

 
$
0.64

Discontinued operations
 
—

 
0.01

 
(0.06
)
 
0.03

Total Diluted (Loss) Earnings per Share
 
$
(0.04
)
 
$
0.22

 
$
0.17

 
$
0.67


The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Xerox 2015 Form 10-Q
3

XEROX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)

 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(in millions)
 
2015
 
2014
 
2015
 
2014
Net (loss) income
 
$
(31
)
 
$
272

 
$
216

 
$
830

Less: Net income attributable to noncontrolling interests
 
3

 
6

 
13

 
17

Net (Loss) Income Attributable to Xerox
 
(34
)
 
266

 
203

 
813

 
 
 
 
 
 
 
 
 
Other Comprehensive (Loss) Income, Net(1):
 

 

 

 

Translation adjustments, net
 
(206
)
 
(492
)
 
(521
)
 
(401
)
Unrealized gains (losses), net
 
8

 
(9
)
 
18

 
32

Changes in defined benefit plans, net
 
97

 
73

 
262

 
(81
)
Other Comprehensive Loss, Net
 
(101
)
 
(428
)
 
(241
)
 
(450
)
Less: Other comprehensive loss, net attributable to noncontrolling interests
 
(1
)
 
(2
)
 
(1
)
 
(1
)
Other Comprehensive Loss, Net Attributable to Xerox
 
(100
)
 
(426
)
 
(240
)
 
(449
)
 
 
 
 
 
 
 
 
 
Comprehensive (Loss) Income, Net
 
(132
)
 
(156
)
 
(25
)
 
380

Less: Comprehensive income, net attributable to noncontrolling interests
 
2

 
4

 
12

 
16

Comprehensive (Loss) Income, Net Attributable to Xerox
 
$
(134
)
 
$
(160
)
 
$
(37
)
 
$
364


(1) Refer to Note 16 - Other Comprehensive Loss for gross components of Other Comprehensive Loss, reclassification adjustments out of Accumulated Other Comprehensive Loss and related tax effects.


The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.


Xerox 2015 Form 10-Q
4

XEROX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in millions, except share data in thousands)
 
September 30,
2015
 
December 31, 2014 (1)
Assets
 
 
 
 
Cash and cash equivalents
 
$
804

 
$
1,411

Accounts receivable, net
 
2,612

 
2,652

Billed portion of finance receivables, net
 
115

 
110

Finance receivables, net
 
1,314

 
1,425

Inventories
 
1,110

 
934

Assets of discontinued operations
 
—

 
1,260

Other current assets
 
1,044

 
1,082

Total current assets
 
6,999

 
8,874

Finance receivables due after one year, net
 
2,570

 
2,719

Equipment on operating leases, net
 
491

 
525

Land, buildings and equipment, net
 
1,044

 
1,123

Investments in affiliates, at equity
 
1,387

 
1,338

Intangible assets, net
 
1,840

 
2,031

Goodwill
 
8,839

 
8,805

Other long-term assets
 
1,776

 
2,243

Total Assets
 
$
24,946

 
$
27,658

Liabilities and Equity
 
 
 
 
Short-term debt and current portion of long-term debt
 
$
1,183

 
$
1,427

Accounts payable
 
1,477

 
1,584

Accrued compensation and benefits costs
 
696

 
754

Unearned income
 
435

 
431

Liabilities of discontinued operations
 
—

 
371

Other current liabilities
 
1,591

 
1,509

Total current liabilities
 
5,382

 
6,076

Long-term debt
 
6,393

 
6,314

Pension and other benefit liabilities
 
2,493

 
2,847

Post-retirement medical benefits
 
769

 
865

Other long-term liabilities
 
403

 
454

Total Liabilities
 
15,440

 
16,556

 
 
 
 
 
Series A Convertible Preferred Stock
 
349

 
349

 
 
 
 
 
Common stock
 
1,078

 
1,124

Additional paid-in capital
 
3,632

 
4,283

Treasury stock, at cost
 
(691
)
 
(105
)
Retained earnings
 
9,493

 
9,535

Accumulated other comprehensive loss
 
(4,399
)
 
(4,159
)
Xerox shareholders’ equity
 
9,113

 
10,678

Noncontrolling interests
 
44

 
75

Total Equity
 
9,157

 
10,753

Total Liabilities and Equity
 
$
24,946

 
$
27,658

 
 
 
 
 
Shares of common stock issued
 
1,077,523

 
1,124,354

Treasury stock
 
(65,120
)
 
(7,609
)
Shares of Common Stock Outstanding
 
1,012,403

 
1,116,745

(1) Certain prior year amounts have been revised - Refer to Note 1 - Basis of Presentation for additional information.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
 

Xerox 2015 Form 10-Q
5

XEROX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(in millions)
 
2015
 
2014
 
2015
 
2014
Cash Flows from Operating Activities:
 
 
 
 
 
 
 
 
Net (loss) income
 
$
(31
)
 
$
272

 
$
216

 
$
830

Adjustments required to reconcile net (loss) income to cash flows from operating activities:
 
 
 
 
 
 
 
 
Depreciation and amortization
 
317

 
349

 
910

 
1,070

Provision for receivables
 
16

 
18

 
48

 
56

Provision for inventory
 
8

 
6

 
24

 
20

Net loss (gain) on sales of businesses and assets
 
5

 
(9
)
 
67

 
(38
)
Undistributed equity in net income of unconsolidated affiliates
 
(37
)
 
(37
)
 
(71
)
 
(77
)
Stock-based compensation
 
(8
)
 
26

 
37

 
76

Restructuring and asset impairment charges
 
20

 
28

 
191

 
93

Payments for restructurings
 
(20
)
 
(31
)
 
(81
)
 
(103
)
Contributions to defined benefit pension plans
 
(50
)
 
(101
)
 
(148
)
 
(206
)
Decrease (increase) in accounts receivable and billed portion of finance receivables
 
115

 
(96
)
 
(130
)
 
(485
)
Collections of deferred proceeds from sales of receivables
 
58

 
106

 
192

 
332

Increase in inventories
 
(61
)
 
(34
)
 
(254
)
 
(137
)
Increase in equipment on operating leases
 
(71
)
 
(81
)
 
(210
)
 
(204
)
(Increase) decrease in finance receivables
 
(30
)
 
28

 
48

 
82

Collections on beneficial interest from sales of finance receivables
 
10

 
20

 
37

 
62

Increase in other current and long-term assets
 
(34
)
 
(61
)
 
(94
)
 
(179
)
(Decrease) increase in accounts payable and accrued compensation
 
(67
)
 
126

 
(105
)
 
38

Increase (decrease) in other current and long-term liabilities
 
271

 
28

 
188

 
(80
)
Net change in income tax assets and liabilities
 
(142
)
 
56

 
(93
)
 
128

Net change in derivative assets and liabilities
 
(19
)
 
(4
)
 
(17
)
 
(25
)
Other operating, net
 
21

 
(14
)
 
(22
)
 
(47
)
Net cash provided by operating activities
 
271

 
595

 
733

 
1,206

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
Cost of additions to land, buildings and equipment
 
(39
)
 
(91
)
 
(191
)
 
(277
)
Proceeds from sales of land, buildings and equipment
 
7

 
8

 
23

 
43

Cost of additions to internal use software
 
(26
)
 
(21
)
 
(71
)
 
(61
)
Proceeds from sale of businesses
 
6

 
1

 
939

 
16

Acquisitions, net of cash acquired
 
(153
)
 
(25
)
 
(201
)
 
(306
)
Other investing, net
 
(1
)
 
—

 
28

 
11

Net cash (used in) provided by investing activities
 
(206
)
 
(128
)
 
527

 
(574
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
Net payments on debt
 
(74
)
 
(40
)
 
(171
)
 
(335
)
Common stock dividends
 
(84
)
 
(77
)
 
(231
)
 
(218
)
Preferred stock dividends
 
(6
)
 
(6
)
 
(18
)
 
(18
)
Proceeds from issuances of common stock
 
3

 
10

 
17

 
49

Excess tax benefits from stock-based compensation
 
14

 
9

 
17

 
15

Payments to acquire treasury stock, including fees
 
(691
)
 
(251
)
 
(1,302
)
 
(730
)
Repurchases related to stock-based compensation
 
(49
)
 
(39
)
 
(50
)
 
(40
)
Distributions to noncontrolling interests
 
(1
)
 
(23
)
 
(57
)
 
(40
)
Other financing
 
—

 
—

 
(1
)
 
(10
)
Net cash used in financing activities
 
(888
)
 
(417
)
 
(1,796
)
 
(1,327
)
Effect of exchange rate changes on cash and cash equivalents
 
(14
)
 
(42
)
 
(71
)
 
(54
)
(Decrease) increase in cash and cash equivalents
 
(837
)
 
8

 
(607
)
 
(749
)
Cash and cash equivalents at beginning of period
 
1,641

 
1,007

 
1,411

 
1,764

Cash and Cash Equivalents at End of Period
 
$
804

 
$
1,015

 
$
804

 
$
1,015


The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Xerox 2015 Form 10-Q
6

XEROX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except per-share data and where otherwise noted)

Note 1 – Basis of Presentation
References herein to “we,” “us,” “our,” the “Company” and “Xerox” refer to Xerox Corporation and its consolidated subsidiaries unless the context suggests otherwise.
We have prepared the accompanying unaudited Condensed Consolidated Financial Statements in accordance with the accounting policies described in our 2014 Annual Report on Form 10-K (2014 Annual Report), and the interim reporting requirements of Form 10-Q. Accordingly, certain information and note disclosures normally included in our annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. You should read these Condensed Consolidated Financial Statements in conjunction with the Consolidated Financial Statements included in our 2014 Annual Report.
In our opinion, all adjustments which are necessary for a fair statement of financial position, operating results and cash flows for the interim periods presented have been made. These adjustments consist of normal recurring items. Interim results of operations are not necessarily indicative of the results of the full year.
For convenience and ease of reference, we refer to the financial statement caption “(Loss) Income before Income Taxes and Equity Income” as “pre-tax (loss) income.”
In December 2014 we announced an agreement to sell our Information Technology Outsourcing (ITO) business to Atos SE (Atos). As a result of this agreement and having met applicable accounting requirements, we reported the ITO business as held for sale and a discontinued operation at December 31, 2014 through its sale, which was completed on June 30, 2015. In 2014 we also completed the disposal of two smaller businesses - Xerox Audio Visual Solutions, Inc. (XAV) and Truckload Management Services (TMS) - that were also reported as discontinued operations. All prior periods have been reclassified to conform to the presentation of these businesses as discontinued operations. Refer to Note 5 - Divestitures, for additional information regarding discontinued operations.
During the third quarter 2015, we recorded a $16 out-of-period adjustment associated with the over accrual of an employee benefit liability account. The impact of this adjustment was not material to any individual prior quarter or year and is not material to anticipated 2015 results.
During second quarter 2015, in connection with Fuji Xerox’s (FX) payment of its semi-annual dividend, we determined that the dividends were no longer subject to an additional tax as a result of a change in the U.K. - Japan Tax Treaty in December 2014. As of December 31, 2014, we had a deferred tax liability of $44 associated with this additional tax on the undistributed earnings of FX through that date. This deferred tax liability was no longer required as a result of the change in the Tax Treaty and, therefore, should have been reversed in December 2014. There was no impact on operating cash flows from this adjustment. We assessed the materiality of this error on our 2014 financial statements and concluded that it was not material to the fourth quarter or annual period. However, due to the impact of this adjustment on the current year consolidated financial statements, the accompanying unaudited Condensed Consolidated Balance Sheet has been revised as of December 31, 2014 to increase retained earnings by $44 and decrease our deferred tax liabilities by the same amount.

 

Xerox 2015 Form 10-Q
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The following table presents the effect of this correction on our Consolidated Statements of Income for all periods affected:
 
 
Three Months Ended December 31, 2014
 
Year Ended December 31, 2014
 
 
As Reported
 
As Revised
 
As Reported
 
As Revised
Income tax expense
 
$
78

 
$
34

 
$
259

 
$
215

Income from Continuing Operations
 
311

 
355

 
1,107

 
1,151

Net Income
 
162

 
206

 
992

 
1,036

Net Income Attributable to Xerox
 
156

 
200

 
969

 
1,013

Net Income Attributable to Xerox - continuing operations
 
305

 
349

 
1,084

 
1,128

 
 
 
 
 
 
 
 
 
Basic Earnings per Share:
 
 
 
 
 
 
 
 
Continuing Operations
 
$
0.26

 
$
0.30

 
$
0.92

 
$
0.96

Total Basic Earnings per Share
 
0.13

 
0.17

 
0.82

 
0.86

 
 
 
 
 
 
 
 
 
Diluted Earnings per Share:
 
 
 
 
 
 
 
 
Continuing Operations
 
$
0.26

 
$
0.30

 
$
0.90

 
$
0.94

Total Diluted Earnings per Share
 
0.13

 
0.17

 
0.81

 
0.85

The following table presents the effect this correction had on our Consolidated Balance Sheet at December 31, 2014:
 
 
December 31, 2014
 
 
As Reported
 
As Revised
Other long-term liabilities
 
$
498

 
$
454

Total Liabilities
 
16,600

 
16,556

Retained earnings
 
9,491

 
9,535

Xerox shareholders' equity
 
10,634

 
10,678

Total Equity
 
10,709

 
10,753

The correction did not have an effect on the Company’s operating cash flows. The following table presents the effect on the individual line items within operating cash flows of our Consolidated Statement of Cash Flows for the year ended December 31, 2014:
 
 
Year Ended December 31, 2014
 
 
As Reported
 
As Revised
Net income
 
$
992

 
$
1,036

Net change in income tax assets and liabilities
 
29

 
(15
)



Xerox 2015 Form 10-Q
8

Note 2 – Recent Accounting Pronouncements
Revenue Recognition: In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for our fiscal year beginning January 1, 2018, with early adoption permitted for fiscal years beginning January 1, 2017. The standard will be adopted using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09. We are currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements.
Interest: In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Debt issuance costs are currently reported as a deferred charge in Other long-term assets and were $34 at September 30, 2015. This update is effective for our fiscal year beginning January 1, 2016 with early adoption permitted. The adoption of this standard is not expected to have a material effect on our financial condition, results of operations or cash flows.
Discontinued Operations: In April 2014, the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The update changes the requirements for reporting discontinued operations in Subtopic 205-20. A discontinued operation may include a component of an entity or a group of components of an entity, or a business. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. Examples include a disposal of a major geographic area, a major line of business or a major equity method investment. Additionally, the update requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income and expenses of discontinued operations. This update was effective prospectively for our fiscal year beginning January 1, 2015. The standard primarily involves presentation and disclosure and, therefore, is not expected to have a material impact on our financial condition, results of operations or cash flows.
Service Concession Arrangements: In January 2014, the FASB issued ASU 2014-05, Service Concession Arrangements (Topic 853). This update specifies that an entity should not account for a service concession arrangement within the scope of this update as a lease in accordance with Topic 840, Leases. The update was effective for our fiscal year beginning January 1, 2015. The adoption of this standard did not have a material effect on our financial condition, results of operation or cash flows.
Other Updates
In 2015 and 2014, the FASB also issued the following Accounting Standards Updates which are not expected to have a material impact on our financial condition, results of operations or cash flows when adopted in future periods. Those updates are as follows:
•
Business Combinations: ASU 2015-16, Accounting for Measurement Period Adjustments in a Business Combination, which is effective for our fiscal year beginning January 1, 2016.
•
Inventory: ASU 2015-11, Simplifying the Subsequent Measurement of Inventory, which is effective for our fiscal year beginning January 1, 2017.
•
Fair Value Measurements: ASU 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or its Equivalent), which is effective for our fiscal year beginning January 1, 2016.
•
Intangibles - Goodwill and Other - Internal Use Software: ASU 2015-05, Intangibles-Goodwill and Other-Internal Use Software - Customer's Accounting for Fees Paid in a Cloud Computing Arrangement., which is effective for our fiscal year beginning January 1, 2016.

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9

•
Consolidation: ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. This update is effective for our fiscal year beginning January 1, 2016 with early adoption permitted, and is applied on a retrospective or modified retrospective basis.
•
Income Statement: ASU 2015-01, Income Statement - Extraordinary and Unusual Items (Subtopic 225-20) - Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. The standard primarily involves presentation and disclosure.
•
Derivatives and Hedging: ASU 2014-16, Derivatives and Hedging (Topic 815) - Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity, which is effective for our fiscal year beginning January 1, 2016, with early adoption permitted.
•
Disclosures of Going Concern Uncertainties: ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40); Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which is effective for our fiscal year beginning January 1, 2016, with early adoption permitted.
•
Stock Compensation: ASU 2014-12, Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could be Achieved after the Requisite Service Period, which is effective for our fiscal year beginning January 1, 2016, with early adoption permitted.

Note 3 – Segment Reporting
Our reportable segments are aligned with how we manage the business and view the markets we serve. We report our financial performance based on the following two primary reportable segments – Services and Document Technology. Our Services segment operations involve delivery of a broad range of services, including business process and document outsourcing. Our Document Technology segment includes the sale and support of a broad range of document systems from entry level to high-end.
The Services segment is comprised of two outsourcing service offerings:
 
•
Business Process Outsourcing (BPO)
•
Document Outsourcing (which includes Managed Print Services) (DO)
Business process outsourcing services include service arrangements where we manage a customer’s business activity or process. We provide multi-industry offerings such as customer care, transaction processing, finance and accounting, and human resources, as well as industry-focused offerings in areas such as healthcare, transportation, financial services, retail and telecommunications. Document outsourcing services include service arrangements that allow customers to streamline, simplify and digitize document-intensive business processes through automation and deployment of software applications and tools and the management of their printing needs. Document outsourcing services also include revenues from our partner print services offerings.
Our Document Technology segment includes the sale of products that share common technology, manufacturing and product platforms. Our products groupings range from:
 
•
“Entry,” which includes A4 devices and desktop printers; to
•
“Mid-range,” which includes A3 devices that generally serve workgroup environments in midsize to large enterprises and includes products that fall into the following market categories: Color 41+ ppm priced at less than $100K and Light Production 91+ ppm priced at less than $100K; to
•
“High-end,” which includes production printing and publishing systems that generally serve the graphic communications marketplace and large enterprises.
Customers range from small and mid-sized businesses to large enterprises. Customers also include graphic communication enterprises as well as channel partners including distributors and resellers. Segment revenues reflect the sale of document systems and supplies, technical services and product financing.

The segment classified as Other includes several units, none of which meet the thresholds for separate segment reporting. This group includes paper sales in our developing market countries, Wide Format Systems, licensing revenues, Global Imaging Systems (GIS) network integration solutions and electronic presentation systems, non-allocated corporate items including non-financing interest and other items included in Other expenses, net.

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Operating segment revenues and profitability were as follows:
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
Segment
Revenue
 
Segment Profit (Loss)
 
Segment
Revenue
 
Segment Profit(Loss)
2015
 
 
 
 
 
 
 
Services (1)
$
2,416

 
$
(184
)
 
$
7,499

 
$
197

Document Technology
1,778

 
227

 
5,488

 
658

Other
139

 
(76
)
 
405

 
(214
)
Total
$
4,333

 
$
(33
)
 
$
13,392

 
$
641

2014
 
 
 
 
 
 
 
Services
$
2,623

 
$
240

 
$
7,859

 
$
688

Document Technology
2,029

 
284

 
6,199

 
839

Other
143

 
(82
)
 
449

 
(207
)
Total
$
4,795

 
$
442

 
$
14,507

 
$
1,320

__________________________
(1)
The Services segment results for the three and nine months ended September 30,2015 include a charge of $389 related to our Health Enterprise platform implementations in California and Montana. $116 of the charge was recorded as a reduction to revenues and the remainder of $273 was recorded to Cost of outsourcing, maintenance and rentals.
 
 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
Reconciliation to Pre-tax Income
 
2015
 
2014
 
2015
 
2014
Segment (Loss) Profit
 
$
(33
)
 
$
442

 
$
641

 
$
1,320

Reconciling items:
 
 
 
 
 
 
 
 
Restructuring and asset impairment charges, and related costs(1)
 
(22
)
 
(33
)
 
(200
)
 
(108
)
Restructuring charges of Fuji Xerox
 
(2
)
 
(1
)
 
(4
)
 
(3
)
Amortization of intangible assets
 
(77
)
 
(77
)
 
(233
)
 
(232
)
Equity in net income of unconsolidated affiliates
 
(40
)
 
(44
)
 
(103
)
 
(119
)
Other
 
1

 
(1
)
 
1

 
—

Pre-tax (Loss) Income
 
$
(173
)
 
$
286

 
$
102

 
$
858

__________________________
(1)
Includes business transformation costs of $2 and $6 for the three months ended September 30, 2015 and 2014, respectively, and $9 and $16 for the nine months ended September 30, 2015 and 2014, respectively. Business transformation costs represent incremental costs incurred directly in support of our business transformation and restructuring initiatives such as compensation costs for overlapping staff, consulting costs and training costs.

Note 4 – Acquisitions
In September 2015, we acquired RSA Medical LLC (RSA Medical), a leading provider of health assessment and risk management for members interacting with health and life insurance companies, for $141 in cash. The acquisition of RSA Medical will expand Xerox's portfolio of healthcare service offerings to payers and life insurers using predictive analytics to enhance member outreach services aimed at improving overall population health. RSA Medical is included in our Services segment.
In January 2015, we acquired Intellinex LLC (Intellinex), formerly Intrepid Learning Solutions, Inc., a Seattle-based company, for $28 in cash. Intellinex provides outsourced learning services primarily in the aerospace manufacturing and technology industries. The acquisition of Intellinex will solidify the position of Xerox's Learning Services unit as a leading provider of end-to-end outsourced learning services, and adds key vertical market expertise in the aerospace industry. Intellinex is included in our Services segment.
During 2015 we also acquired two additional businesses in our Services segment for approximately $26 in cash, and one additional business in our Document Technology segment for approximately $6 in cash.
The operating results of these acquisitions are not material to our financial statements and are included within our results from the acquisition dates. The purchase prices were allocated primarily to intangible assets, goodwill and internal use software based on third-party valuations and management’s estimates.


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Note 5 – Divestitures
Information Technology Outsourcing (ITO)
In December 2014 we announced an agreement to sell the ITO business to Atos and began reporting it as a Discontinued Operation. All prior periods were accordingly revised to conform to this presentation. The sale was completed on June 30, 2015. The final sale price of approximately $940 ($930 net of cash sold) reflects closing adjustments, including an adjustment for changes in net asset values and additional proceeds for the condition of certain assets at the closing. Atos also assumed approximately $85 of capital lease obligations and pension liabilities. Net after-tax proceeds are estimated to be approximately $850, which reflects expected cash taxes as well as our transaction and transition costs associated with the disposal. The ITO business included approximately 9,600 employees in 42 countries, who were transferred to Atos upon closing.
In fourth quarter 2014, we recorded a net pre-tax loss of $181 related to the pending sale, reflecting the write-down of the carrying value of the ITO disposal group, inclusive of goodwill, to its estimated fair value less costs to sell. In 2015, we recorded an additional net pre-tax loss of $77 ($5 in third quarter 2015) primarily related to adjustment of the sales price and related expenses associated with the disposal, as well as reserves for certain obligations and indemnifications we retained as part of the final closing negotiations. In addition, we recorded tax expense of $52 ($2 in third quarter 2015) primarily related to the difference between the book basis and tax basis of allocated goodwill, which could only be recorded upon final disposal of the business. The amounts recorded in third quarter 2015 primarily represent changes in estimates associated with post-closing adjustments.
The transaction continues to be subject to post-closing adjustments primarily related to a final true-up of net assets and other indemnification obligations. In the event there are additional charges associated with this disposal, we will record such amounts through discontinued operations in future periods.
Other Discontinued Operations
Other discontinued operations include the 2014 closure of Xerox Audio Visual Solutions, Inc. (XAV) and the 2014 sale of our Truckload Management Services, Inc. (TMS) business.
Summarized financial information for our Discontinued Operations is as follows:
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2015
 
2014
 
2015
 
2014
 
 
ITO
 
Other
 
Total
 
ITO
 
Other
 
Total
 
ITO
 
Other
 
Total
 
ITO
 
Other
 
Total
Revenues
 
$
—

 
$
—

 
$
—

 
$
325

 
$
6

 
$
331

 
$
619

 
$
—

 
$
619

 
$
993

 
$
45

 
$
1,038

Income (loss) from operations (1), (2)
 
—

 
—

 
—

 
15

 
(1
)
 
14

 
104

 
—

 
104

 
58

 
(1
)
 
57

Loss on disposal
 
(5
)
 
—

 
(5
)
 
—

 
(1
)
 
(1
)
 
(77
)
 
—

 
(77
)
 
—

 
(1
)
 
(1
)
Net (loss) income before income taxes
 
$
(5
)
 
$
—

 
$
(5
)
 
$
15

 
$
(2
)
 
$
13

 
$
27

 
$
—

 
$
27

 
$
58

 
$
(2
)
 
$
56

Income tax benefit (expense)
 
2

 
—

 
2

 
(6
)
 
1

 
(5
)
 
(91
)
 
—

 
(91
)
 
(21
)
 
(1
)
 
(22
)
(Loss) income from discontinued operations, net of tax
 
$
(3
)
 
$
—

 
$
(3
)
 
$
9

 
$
(1
)
 
$
8

 
$
(64
)
 
$
—

 
$
(64
)
 
$
37

 
$
(3
)
 
$
34

_______________
(1)
ITO Income from operations for the nine months ended September 30, 2015, excludes approximately $80 of depreciation and amortization expenses (including $14 for intangible amortization) since the business was held for sale.
(2)
ITO Income from operations for the three and nine months ended September 30, 2014, includes approximately $41 and $121, respectively, of depreciation and amortization expense (including intangible amortization of approximately $7 and $21, respectively).


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The following is a summary of the major categories of assets and liabilities of the ITO business held for sale at December 31, 2014:
 
 
December 31, 2014
Accounts receivable, net
 
$
213

Other current assets
 
146

Land, buildings and equipment, net
 
220

Intangible assets, net
 
197

Goodwill
 
337

Other long-term assets
 
147

Total Assets of Discontinued Operations
 
$
1,260

 
 
 
Current portion of long-term debt
 
$
31

Accounts payable
 
32

Accrued pension and benefit costs
 
9

Unearned income
 
64

Other current liabilities
 
112

Long-term debt
 
44

Pension and other benefit liabilities
 
25

Other long-term liabilities
 
54

Total Liabilities of Discontinued Operations
 
$
371


Note 6 – Accounts Receivable, Net
Accounts receivable, net were as follows:
 
 
September 30, 2015
 
December 31, 2014
Amounts billed or billable
 
$
2,399

 
$
2,421

Unbilled amounts
 
294

 
318

Allowance for doubtful accounts
 
(81
)
 
(87
)
Accounts Receivable, Net
 
$
2,612

 
$
2,652


Unbilled amounts include amounts associated with percentage-of-completion accounting and other earned revenues not currently billable due to contractual provisions. Amounts to be invoiced in the subsequent month for current services provided are included in amounts billable, and at September 30, 2015 and December 31, 2014 were approximately $875 and $945, respectively.

We perform ongoing credit evaluations of our customers and adjust credit limits based upon customer payment history and current creditworthiness. The allowance for uncollectible accounts receivable is determined principally on the basis of past collection experience, as well as consideration of current economic conditions and changes in our customer collection trends.
Accounts Receivable Sales Arrangements
Accounts receivable sales arrangements are utilized in the normal course of business as part of our cash and liquidity management. We have facilities in the U.S., Canada and several countries in Europe that enable us to sell certain accounts receivable without recourse to third-parties. The accounts receivable sold are generally short-term trade receivables with payment due dates of less than 60 days.

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All of our arrangements involve the sale of our entire interest in groups of accounts receivable for cash. In most instances a portion of the sales proceeds are held back by the purchaser and payment is deferred until collection of the related receivables sold. Such holdbacks are not considered legal securities nor are they certificated. We report collections on such receivables as operating cash flows in the Condensed Consolidated Statements of Cash Flows because such receivables are the result of an operating activity and the associated interest rate risk is de minimis due to its short-term nature. Our risk of loss following the sales of accounts receivable is limited to the outstanding deferred purchase price receivable. These receivables are included in the caption Other current assets in the accompanying Condensed Consolidated Balance Sheets and were $68 and $73 at September 30, 2015 and December 31, 2014, respectively.
Under most of the arrangements, we continue to service the sold accounts receivable. When applicable, a servicing liability is recorded for the estimated fair value of the servicing. The amounts associated with the servicing liability were not material.
Of the accounts receivable sold and derecognized from our balance sheet, $516 and $580 remained uncollected as of September 30, 2015 and December 31, 2014, respectively.
Accounts receivable sales were as follows:
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2015
 
2014
 
2015
 
2014
Accounts receivable sales
$
551

 
$
696

 
$
1,739

 
$
2,244

Deferred proceeds
67

 
94

 
186

 
314

Loss on sales of accounts receivable
3

 
4

 
9

 
12

Estimated decrease to operating cash flows(1)
(31
)
 
(22
)
 
(45
)
 
(42
)
__________________________
(1)
Represents the difference between current and prior period receivable sales adjusted for the effects of: (i) the deferred proceeds, (ii) collections prior to the end of the quarter and, (iii) currency.
Note 7 - Finance Receivables, Net
Sale of Finance Receivables
In 2013 and 2012, we transferred our entire interest in certain groups of lease finance receivables to third-party entities for cash proceeds and beneficial interests. The transfers were accounted for as sales with derecognition of the associated lease receivables. There have been no transfers of finance receivables since the year ended December 31, 2013. We continue to service the sold receivables and record servicing fee income over the expected life of the associated receivables.
The following is a summary of our prior sales activity.
 
 
Year Ended December 31,
 
 
2013
 
2012
Net carrying value (NCV) sold
 
$
676

 
$
682

Allowance included in NCV
 
17

 
18

Cash proceeds received
 
635

 
630

Beneficial interests received
 
86

 
101

The principal value of finance receivables derecognized from our balance sheet was $301 and $549 (sales value of approximately $323 and $596) at September 30, 2015 and December 31, 2014, respectively.

Summary
The lease portfolios transferred and sold were from our Document Technology segment. The ultimate purchaser has no recourse to our other assets for the failure of customers to pay principal and interest when due beyond our beneficial interests, which were $46 and $77 at September 30, 2015 and December 31, 2014, respectively, and are included in the caption Other current assets and Other long-term assets in the accompanying Condensed Consolidated Balance Sheets. Beneficial interests of $37 and $64 at September 30, 2015 and December 31, 2014, respectively, are held by bankruptcy-remote subsidiaries and therefore are not available to satisfy any of our creditor

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obligations. We report collections on the beneficial interests as operating cash flows in the Condensed Consolidated Statements of Cash Flows because such beneficial interests are the result of an operating activity, and the associated interest rate risk is de minimis considering their weighted average lives of less than 2 years.

The net impact from the sales of finance receivables on operating cash flows is summarized below:
 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
 
2015
 
2014
 
2015
 
2014
Impact from prior sales of finance receivables(1)
 
$
(79
)
 
$
(125
)
 
$
(273
)
 
$
(411
)
Collections on beneficial interest
 
12

 
23

 
45

 
74

Estimated Decrease to Operating Cash Flows
 
$
(67
)
 
$
(102
)
 
$
(228
)
 
$
(337
)
____________________________ 
(1)     Represents cash that would have been collected had we not sold finance receivables.
Finance Receivables – Allowance for Credit Losses and Credit Quality
Finance receivables include sales-type leases, direct financing leases and installment loans. Our finance receivable portfolios are primarily in the U.S., Canada and Europe. We generally establish customer credit limits and estimate the allowance for credit losses on a country or geographic basis. Our policy and methodology used to establish our allowance for doubtful accounts has been consistently applied over all periods presented.
 

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The following table is a rollforward of the allowance for doubtful finance receivables as well as the related investment in finance receivables:
Allowance for Credit Losses:
 
United States
 
Canada
 
Europe
 
Other(3)
 
Total
Balance at December 31, 2014
 
$
41

 
$
20

 
$
58

 
$
12

 
$
131

Provision
 
2

 
1

 
5

 
3

 
11

Charge-offs
 
—

 
(3
)
 
(1
)
 
(1
)
 
(5
)
Recoveries and other(1)
 
—

 
—

 
(6
)
 
—

 
(6
)
Balance at March 31, 2015
 
$
43

 
$
18

 
$
56

 
$
14

 
$
131

Provision
 
1

 
1

 
6

 
2

 
10

Charge-offs
 
(1
)
 
(2
)
 
(5
)
 
(2
)
 
(10
)
Recoveries and other(1)
 
(1
)
 
1

 
3

 
—

 
3

Balance at June 30, 2015
 
$
42

 
$
18

 
$
60

 
$
14

 
$
134

Provision
 
1

 
1

 
6

 
1

 
9

Charge-offs
 
—

 
(3
)
 
(1
)
 
—

 
(4
)
Recoveries and other(1)
 
—

 
—

 
(1
)
 
—

 
(1
)
Balance at September 30, 2015
 
$
43

 
$
16

 
$
64

 
$
15

 
$
138

Finance receivables as of September 30, 2015 collectively evaluated for impairment(2)
 
$
1,744

 
$
366

 
$
1,562

 
$
465

 
$
4,137

 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2013
 
$
45

 
$
22

 
$
81

 
$
6

 
$
154

Provision
 
3

 
2

 
7

 
3

 
15

Charge-offs
 
(1
)
 
(4
)
 
(5
)
 
(2
)
 
(12
)
Recoveries and other(1)
 
1

 
—

 
—

 
—

 
1

Balance at March 31, 2014
 
$
48

 
$
20

 
$
83

 
$
7

 
$
158

Provision
 
1

 
2

 
11

 
1

 
15

Charge-offs
 
—

 
(4
)
 
(8
)
 
1

 
(11
)
Recoveries and other(1)
 
—

 
2

 
—

 
—

 
2

Balance at June 30, 2014
 
$
49

 
$
20

 
$
86

 
$
9

 
$
164

Provision
 
(1
)
 
2

 
7

 
2

 
10

Charge-offs
 
(2
)
 
(2
)
 
(7
)
 
(1
)
 
(12
)
Recoveries and other(1)
 
1

 
1

 
(6
)
 
(1
)
 
(5
)
Balance at September 30, 2014
 
$
47

 
$
21

 
$
80

 
$
9

 
$
157

Finance receivables as of September 30, 2014 collectively evaluated for impairment(2)
 
$
1,699

 
$
404

 
$
1,952

 
$
363

 
$
4,418

 __________________
(1)
Includes the impacts of foreign currency translation and adjustments to reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations.
(2)
Total Finance receivables exclude the allowance for credit losses of $138 and $157 at September 30, 2015 and 2014, respectively.
(3)
Includes developing market countries and smaller units.
We evaluate our customers based on the following credit quality indicators:
•
Investment grade: This rating includes accounts with excellent to good business credit, asset quality and the capacity to meet financial obligations. These customers are less susceptible to adverse effects due to shifts in economic conditions or changes in circumstance. The rating generally equates to a Standard & Poors (S&P) rating of BBB- or better. Loss rates in this category are normally minimal at less than 1%.
•
Non-investment grade: This rating includes accounts with average credit risk that are more susceptible to loss in the event of adverse business or economic conditions. This rating generally equates to a BB S&P rating. Although we experience higher loss rates associated with this customer class, we believe the risk is somewhat mitigated by the fact that our leases are fairly well dispersed across a large and diverse customer base. In addition, the higher loss rates are largely offset by the higher rates of return we obtain on such leases. Loss rates in this category are generally in the range of 2% to 4%.

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•
Substandard: This rating includes accounts that have marginal credit risk such that the customer’s ability to make repayment is impaired or may likely become impaired. We use numerous strategies to mitigate risk including higher rates of interest, prepayments, personal guarantees, etc. Accounts in this category include customers who were downgraded during the term of the lease from investment and non-investment grade status when the lease was originated. Accordingly, there is a distinct possibility for a loss of principal and interest or customer default. The loss rates in this category are around 10%.

Credit quality indicators are updated at least annually and the credit quality of any given customer can change during the life of the portfolio. Details about our finance receivables portfolio based on industry and credit quality indicators are as follows:
 
September 30, 2015
 
December 31, 2014
 
Investment
Grade
 
Non-investment
Grade
 
Substandard
 
Total
Finance
Receivables
 
Investment
Grade
 
Non-investment
Grade
 
Substandard
 
Total
Finance
Receivables
Finance and other services
$
192

 
$
178

 
$
58

 
$
428

 
$
195

 
$
159

 
$
55

 
$
409

Government and education
556

 
12

 
3

 
571

 
589

 
13

 
3

 
605

Graphic arts
142

 
87

 
120

 
349

 
148

 
79

 
90

 
317

Industrial
86

 
44

 
17

 
147

 
92

 
41

 
18

 
151

Healthcare
83

 
25

 
14

 
122

 
84

 
26

 
14

 
124

Other
53

 
48

 
26

 
127

 
55

 
38

 
29

 
122

Total United States
1,112

 
394

 
238

 
1,744

 
1,163

 
356

 
209

 
1,728

Finance and other services
55

 
33

 
10

 
98

 
54

 
31

 
12

 
97

Government and education
60

 
7

 
2

 
69

 
76

 
8

 
2

 
86

Graphic arts
47

 
36

 
23

 
106

 
58

 
49

 
36

 
143

Industrial
23

 
12

 
3

 
38

 
24

 
13

 
4

 
41

Other
32

 
20

 
3

 
55

 
34

 
19

 
4

 
57

Total Canada
217

 
108

 
41

 
366

 
246

 
120

 
58

 
424

France
194

 
253

 
82

 
529

 
253

 
234

 
129

 
616

U.K./Ireland
240

 
95

 
2

 
337

 
255

 
101

 
6

 
362

Central(1)
213

 
195

 
29

 
437

 
230

 
278

 
30

 
538

Southern(2)
40

 
128

 
29

 
197

 
60

 
148

 
36

 
244

Nordics(3)
24

 
38

 
—

 
62

 
25

 
49

 
1

 
75

Total Europe
711

 
709

 
142

 
1,562

 
823

 
810

 
202

 
1,835

Other
170

 
229

 
66

 
465

 
195

 
163

 
40

 
398

Total
$
2,210

 
$
1,440

 
$
487

 
$
4,137

 
$
2,427

 
$
1,449

 
$
509

 
$
4,385

_____________________________

(1)
Switzerland, Germany, Austria, Belgium and Holland.
(2)
Italy, Greece, Spain and Portugal.
(3)
Sweden, Norway, Denmark and Finland.


Xerox 2015 Form 10-Q
17

The aging of our billed finance receivables is based upon the number of days an invoice is past due and is as follows:
 
September 30, 2015
 
Current
 
31-90
Days
Past Due
 
>90 Days
Past Due
 
Total Billed
 
Unbilled
 
Total
Finance
Receivables
 
>90 Days
and
Accruing
Finance and other services
$
8

 
$
2

 
$
2

 
$
12

 
$
416

 
$
428

 
$
14

Government and education
16

 
4

 
4

 
24

 
547

 
571

 
32

Graphic arts
12

 
2

 
1

 
15

 
334

 
349

 
9

Industrial
3

 
1

 
1

 
5

 
142

 
147

 
9

Healthcare
4

 
1

 
1

 
6

 
116

 
122

 
6

Other
3

 
1

 
—

 
4

 
123

 
127

 
7

Total United States
46

 
11

 
9

 
66